In the 50-Year War on Poverty, Bureaucrats Have Won while Both Taxpayers and Poor People Have Lost

We know the welfare state is good news for people inside government. Lots of bureaucrats are required, after all, to oversee a plethora of redistribution programs.

Walter Williams refers to these paper pushers as poverty pimps, and there’s even a ranking showing which states have the greatest number of these folks who profit by creating dependency.

But does anybody else benefit from welfare programs?

Robert Rector of the Heritage Foundation explains in the Washington Times that the War on Poverty certainly hasn’t been a success for taxpayers or poor people. Instead, it’s created a costly web of dependency.

This year marks the 50th anniversary of PresidentLyndon Johnson’s launch of the War on Poverty. …Since then, the taxpayers have spent $22 trillion onJohnson’s war. Adjusted for inflation, that’s three times the cost of all military wars since the American Revolution. Last year,governmentspent $943 billion providing cash, food, housing and medical care to poor and low-income Americans. …More than 100 million people, or one third of Americans, received some type of welfare aid, at an average cost of $9,000 per recipient.

Here are some of the unpleasant details.

The U.S. Census Bureau has just released its annual poverty report. The report claims that in 2013, 14.5 percent of Americans were poor. Remarkably, that’s almost the same poverty rate as in 1967, three years after the War on Poverty started. How can that be? …WhenJohnsonlaunched the War on Poverty, he wanted to give the poor a “hand up, not a hand out.” He stated that his war would shrink welfare rolls and turn the poor from “tax-eaters” into “taxpayers.”Johnson’s aim was to make poor families self-sufficient — able to rise above poverty through their own earnings without dependence on welfare. The exact opposite happened. For a decade-and-a-half before the War on Poverty began, self-sufficiency in America improved dramatically. For the past 45 years, though, there has been no improvement at all.

The final two sentences of that excerpt are the most important words in Robert’s column.

But once politicians decided government was responsible for fighting poverty, progress ceased.

Why did progress stop? Because, as Robert explains, the welfare state creates a dependency trap and enables self-destructive behavior.

The culprit is, in part, the welfare system itself, which discourages work and penalizes marriage. …The welfare state is self-perpetuating. By undermining the social norms necessary for self-reliance, welfare creates a need for even greater assistance in the future. President Obama plans to spend $13 trillion over the next decade on welfare programs that will discourage work, penalize marriage and undermine self-sufficiency.

By the way, being “poor” in America rarely means material deprivation.

Most Americans who live in “poverty” have much higher living standards that people elsewhere in the world.

The actual living conditions of households labeled as poor by Census are surprising to most people. According to the government’s own surveys, 80 percent of poor households have air conditioning; nearly two-thirds have cable or satellite television; half have a personal computer; 40 percent have a wide-screen HDTV. Three-quarters own a car or truck; nearly a third has two or morevehicles. Ninety-six percent of poor parents state that their children were never hungry atany timeduring the year because they could not afford food. …As a group, poor children are far from being chronically undernourished. The average consumption of protein, vitamins and minerals is virtually the same for poor and middle-class children, and in most cases is well above recommended norms. …the average poor American has more living space than the typical nonpoor individual living in Sweden, France, Germany or the UnitedKingdom.

Current welfare benefits approach +200% of the poverty line. A basic income of 100% for citizens would kill four birds with one stone. (This is not an income floor, but a cash payment that cannot be lost regardless of income earned.)
First, it would get the federal government out of welfare, with states federalising the additional +100% and the tab if they so desire.
Second, that basic income would add a progressive element in a new flat tax, making it politically acceptable. Gone would be disincentives against earning additional income. Everyone would keep 75% of income earned.
Third, it addresses the issue of the income gap directly. Hard working low income families would see a dramatic increase in net take-home pay. There would be no need for job killing minimum wage legislation. (Over time the income gap will probably widen, because of a more dynamic economy.)
Fourth, a basic income will allow us to transition from current entitlements (which would be reduced by the amount of the basic income for no net change), into personal retirement accounts, over a period of time (30 years).

[…] So what’s the moral of the story? Well, the one obvious lesson is that a welfare state is harmful to human progress. It hurts taxpayers, of course, but it also has a harmful impact on recipients. […]

[…] of income security for everybody. Some on the right like the fact that there would be no need for massive bureaucracies to oversee the dozens of income redistribution programs that currently exist. And since everyone […]

[…] I fear, though, that the U.N. panel is primarily interested in “financial support,” which is simply a euphemism for a bigger welfare state. And since the current welfare state already has caused great damage to the black community, making it even bigger would be very ill-advised. […]